Benzinga - by Benzinga Insights, Benzinga Staff Writer.
Making a noteworthy insider sell on April 29, Roger Theodoredis, Chief Legal Officer & GC at Chipotle Mexican Grill (NYSE:CMG), is reported in the latest SEC filing.
What Happened: Theodoredis's recent Form 4 filing with the U.S. Securities and Exchange Commission on Monday unveiled the sale of 2,509 shares of Chipotle Mexican Grill. The total transaction value is $7,939,568.
The latest market snapshot at Tuesday morning reveals Chipotle Mexican Grill shares down by 0.61%, trading at $3189.83.
About Chipotle Mexican Grill Chipotle Mexican Grill is the largest fast-casual chain restaurant in the United States, with systemwide sales of $9.9 billion in 2023. The Mexican concept is predominately company-owned (it recently inked a development agreement with Alshaya Group in the Middle East), with a footprint of nearly 3,440 stores at the end of 2023, heavily indexed to the United States, although the firm maintains a small presence in Canada, the U.K., France, and Germany. Chipotle sells burritos, burrito bowls, tacos, quesadillas, and beverages, with a selling proposition built around competitive prices, high-quality food sourcing, speed of service, and convenience. The company generates its revenue entirely from restaurant sales and delivery fees.
Key Indicators: Chipotle Mexican Grill's Financial Health Positive Revenue Trend: Examining Chipotle Mexican Grill's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 14.07% as of 31 March, 2024, showcasing a substantial increase in top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Consumer Discretionary sector.
Profitability Metrics: Unlocking Value
- Gross Margin: The company excels with a remarkable gross margin of 27.46%, indicating superior cost efficiency and profitability compared to its industry peers.
- Earnings per Share (EPS): Chipotle Mexican Grill's EPS is notably higher than the industry average. The company achieved a positive bottom-line trend with a current EPS of 13.09.
Evaluating Valuation:
- Price to Earnings (P/E) Ratio: Chipotle Mexican Grill's P/E ratio of 68.51 is below the industry average, suggesting the stock may be undervalued.
- Price to Sales (P/S) Ratio: The current P/S ratio of 8.7 is above industry norms, reflecting an elevated valuation for Chipotle Mexican Grill's stock and potential overvaluation based on sales performance.
- EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): A high EV/EBITDA ratio of 44.75 reflects market recognition of Chipotle Mexican Grill's value, positioning it as more highly valued compared to industry peers.
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Uncovering the Importance of Insider Activity Emphasizing the importance of a comprehensive approach, considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.
In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.
When a company insider makes a new purchase, that is an indication that they expect the stock to rise.
Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.
Important Transaction Codes Examining transactions, investors often concentrate on those unfolding in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
Check Out The Full List Of Chipotle Mexican Grill's Insider Trades.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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